South Africa’s significant natural gas reserves and extensive gas infrastructure exemplify the country’s potential to develop a natural gas industry, says senior partner at research and strategy firm Birguid. Patience Panashe.
He says this potential is becoming visible in several local gas projects, such as state oil and gas company PetroSA’s offshore production gas field located in the Bredasdorp Basin in the Western Cape.
As the leading producer of indigenous natural gas in South Africa, PetroSA’s gas field is used as feedstock for its gas-to-liquids refinery in Mossel Bay, also in the Western Cape.
“As this field is being depleted, the liquefied natural gas (LNG) hub planned in the Coega Special Economic Zone in Gqeberha could act as a base for the import of additional raw materials,” says Panashe.
In addition, the Cabinet has announced the planned merger between PetroSA, Strategic Fuel Fund and the gas development company iGas. The merger will help drive efficiency among subsidiaries of the Central Energy Fund, the government’s energy sector holding company.
Another outstanding project is the Virginia gas project of helium and natural gas producer Renergen, in the Free State.
Panashe says Renergen is the only other local natural gas producer using onshore wells at its Virginia gas project, which is also said to be the site of the richest helium deposits in the world.
The natural gas producer is the first company in South Africa to build a small-scale onshore LNG plant, and the company plans to monetize its LNG by developing 12 to 18 LNG service stations in South Africa by 2023.
Renergen has signed an agreement with fuel company TotalEnergies, under which the French major will rename two of its service stations on the N3 national route between Johannesburg in Gauteng and Durban in KwaZulu-Natal. as LNG sales points.
“Companies, such as Renergen, involved in the LNG value chain will lead to the development of environmentally friendly LNG solutions tailored to African needs. LNG’s customer base will operate trucks for logistics companies, given that LNG is displacing diesel use,” says Panashe.
He notes that natural gas exploration is underway, with TotalEnergies’ offshore exploration on block 11b/12b leading to the discovery of Brulpadda gas condensates in 2019.
“This discovery is the first of its kind made in extreme deepwater conditions off the coast of South Africa and has the potential to change South Africa’s energy plans,” he concludes.
